Zscaler's (ZS) new disclosures strengthen its cross-selling story and broaden customer entry points, while the fiscal 2027 landscape remains unchanged, Morgan Stanley said Wednesday in a note.

The brokerage was encouraged by Zscaler's confidence in its ability to capture the growing cybersecurity market, reflected in its base case for organic annual recurring revenue of more than $8 billion by fiscal 2031. A separate $10 billion upside scenario reflects faster agent adoption driving broader portfolio demand alongside adoption of Security for AI, according to the note.

Morgan Stanley said it is looking for stronger pipeline creation to translate into healthier ARR contribution from new customers, with sustained new-logo-driven acceleration needed to increase confidence in Zscaler's long-term growth durability.

Traction across Branch/Cloud, Data Security and Security for AI gives greater substance to the platform opportunity and a path toward less dependence on the foundational user business, the brokerage added.

Morgan Stanley kept an equal weight rating on Zscaler and raised its price target to $185 from $165.

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